Hello world,
With installation of a majority government at center, India has a chance to revamp everything. Rajiv Gandhi had such a chance but except few well thought of innovations he implemented the opportunity was wasted. Despite all shortcomings and fluke nature of electoral victory, Narendra Modi is well placed to implement major reforms in all sectors. If he fails, India will be on the way to become a real banana republic. There are many forums suggesting “do and do not do this and that”. India-centric forces should unite to speak bluntly and loudly what they think the best for India.
Sucheta Dalal is a journalist with an erect spine. She has started highlighting ills in economy. She is a miser in using words in her criticism. She wrote an article , ” Rot at the Top ” in Money Life dated August 18,2014.
I tried to read between the lines.
Without mincing any words and with prejudice to none I simplify her worries without the fear of retaliation or retribution. We have reached a stage of zero tolerance. There is undeclared censorship of Narendra Modi and his government. Media is almost held at ransom. The fear of retaliation and retribution is omnipresent. The forces behind Narendra Modi and his victory are more of financial and less of populist.’ NaMo tsunami’ was a media creation. If that was/is,why should NaMo have selected only winnable candidates instead of qualified and highly qualified candidates? No doubt , winnables won and now they constitute his C team which is very poor ,renegade and criminal. He has not been able to appoint worthy ministers and he has to do work and overwork himself. Broadly speaking he is at the mercy of bureaucrats. He is at the mercy of his MPs too!. Why? If they fail to behave and remain ‘minimum corrupt’ , NaMo’s return journey will start soon. To prevent that he will have spy and snoop every MP of his party ! Here comes Independent Media. Majority of media houses are aligned or owned by this or that ‘HOUSE”. Every successful industrialist, land organizer, builder and the one who aspires to be a public figure has PRESS. This press is used for all sorts of blackmailing and black deals. Media which created ‘NaMo tsunami’ feels heat. Why? it can not sing ‘goody goody’ songs for ever. Hype is over. NaMo’s Reality Distortion Fields have disappeared. Reality is not rosy. Political and governance power acquired demands performance.
Real problems start here. Why? Crow is a crow and sheep is a sheep. Wheat and rice can not be made out from grinded stones. NaMo and his government want media to believe what they say ! The truth is contrary to it. NaMo and his supporting financial forces have now an alternative in Independent Media Trust,the owner of TV 18 and NW 18. Till July-August 2014 there was total freedom of expression on Internet. Now NaMo has TV18 and NW 18 to screw up the rest of the erring media.
Competition Commission of India did not see any infringement in level playing fields. Till now The crows and the sheep in media enjoyed all benefits in cash and kind from NaMo and forces behind him. They feel uncomfortable now.Now they are not the only one to create any tsunami.There will be a competition and that will not be fair in any manner.
The encroachment on Freedom of Speech and Freedom of Expression started long back. National Emergency is not political.It has come via physical and legal forces. Dinanath Batra and persons alike have forced and stalled publication of many books representing counterview. They not only use physical force but also use legal arms. Laws of the land, their implementation and interpretation have always been invariably in favour of forces having financial power. Long back Supreme Court of India stayed the release and sell of “Polyester Prince” written by an Australian author. Indian Judiciary is not a level playing field for anybody.
Now the incomplete task of censorship is complete.
NaMo is most likely to be used by unscrupulous forces. In the utmost desire of preserving political power which has come as a windfall and by fluke he will succumb to his supporters’ pressures.
Sucheta Dalal and others with erect spine and intact mind have ,time and again, reflected and exposed ills in our system.
I feel fortunate to continue their Mission Impossible .
The rot starts in PMO, percolates to ministry of finance, CBDT and into every bank’s board of directors. RBI and SEBI howsoever persist for law compliance they are rendered helpless. As it is mentioned by Sucheta Dalal one of the major beneficiaries of major scams happen to be senior advocates of SCI and high courts having right and meaningful connections with PMO and MoF. Abhisek Manu Singhvi is not the only one. Kapil Sibal,Arun Jaitley and Ram Jethmalani are on record of having served prominent law breakers. The list of such lawyer beneficiaries is long and include members of present Union Cabinet.
Chief Justice of India (retd) Balakrishnan was one of the beneficiaries in a case involving Mukesh Ambani and RIL. The judgment delivered in that case is the most inglorious one in the judicial history of India. It was a sort of a pen drive judgment prepared under the spell of so called looming doomsdays on Indian Economy. As if India was to get bankrupt on revelations of every minor detail involving RIL and Mukesh Ambani. Lest the SCI took the trouble of referring to the ban order on ‘Polyester Prince’ and bothered to go through the pages of ‘Polyester Prince’ which have proved beyond doubt the relevance of its contents.
The growing menace is of MPs representing this and/or that corporate house.As of today, how many corporates have their agents posted either in Lok Sabha and Rajya Sabha? RIL has Parimal Nathwani.Vijay Mallaya was/is one of them.
The practice of 60:40 is one of the major cause of our scams/frauds. 60% means Amul White Money-accounted mouney and 40% is Black Money, under table money, unaccounted money. Everywhere 60:40 prevails. 40 % of evey deal/transaction , howsoever small or big ,contributes to generation of Black Money. It started from August 15,1947. The maximum of Black Money is with polticians (no one is spared),bureaucrats, judges,advocates and the citizens above BPL or above minimum IT paying slab.The cry for getting black money from abroad is just to cheat people of India and provide periodical entertainment to media.The maximum black money is not outside India. It is in/within India. It is everywhere. Everyone knows it and use it at every step in corruption. Why no one is interested to make all deals/transactions to be 100% law compliant instead of present 60:40% ? the cleansing of our economy will be automatic. Is it possible? Amrtya Sen, Jagdish Bhagwati and Panagaria are non-Indians or say they are un-Indian NRIs. they think of big things only. The real big issue is not an issue at all for them. They and their suggestions or prescriptions should be summarily dismissed and they should be told point black to avoid sending advisories to India and Indians. They are better where they are. We know our problem and we know how to solve them.
NaMo is installed as @PMOIndia due to black money. Everyone knows it. Who spent it and why? How can NaMo @PMOIndia eradicate black money.There are many ways, provided he wishes and Arun Jaitley permits. Let the government invite public opinion and let the government change the ‘control habit’ and allow RBI and SEBI to function independently.
Reference material:
I quote,
“Moneylife » Rot at the Top
Rot at the Top
Bankimchandra Desai
Ramesh B Mhadlekar
Prem Bajaj
Viswanathan S N
Veeresh Malik
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Sucheta Dalal | 18/08/2014 12:42 PM |
The government-owned banks are plundered routinely and bailed out periodically. But RBI, SEBI and ministry of finance remain unaccountable and unconcerned
The arrest of SK Jain, chairman and managing director of Syndicate Bank, has sent shockwaves through the banking and corporate world. The Central Bureau of Investigation (CBI) accuses Mr Jain of allegedly taking a bribe of Rs50 lakh for increasing the credit limit of some companies in violation of banking rules. One of the beneficiaries was apparently Bhushan Steel whose managing director Neeraj Singhal has also been arrested.
CBI followed up the Syndicate Bank case by launching a preliminary investigation into IDBI Bank. The Bank sanctioned Rs950-crore first-time loan to Vijay Mallya’s Kingfisher Airlines Ltd when it already had a negative net worth.
CBI’s actions have caused all lending institutions to tighten the screws on borrowers. Fear is running high because nobody knows how many more phones CBI is tapping. But will it lead to a serious, long-term clean-up that includes a focus on political corruption, top appointments at nationalised banks? Let’s take a look.
The Reserve Bank of India (RBI), the banking regulator, until recently, remained content with issuing warnings about burgeoning bad loans. RBI governor, Dr Raghuram Rajan, in his early days in office, was more concerned that inquiries by the Central Vigilance Commission (CVC) that prevented bankers from functioning effectively. Is he now convinced that the bigger problem with Indian banking is the rot at the top?
Dr Rajan recently announced that he is working with the Securities & Exchange Board of India (SEBI) to prevent wilful defaulters from accessing the capital market. We remain sceptical about this, for several reasons.
First, it took five years for SEBI to bar B Ramalinga Raju and four others from the capital market for 14 years. Its order asking them to repay Rs1,849 crore is rather meaningless, when you recall that this is a straightforward case where Mr Raju confessed to the fraud only because he had no money.
No forensic investigation has thrown up a clue about where this money went, although the corporate grapevine is sure that funds were diverted to Maytas (Satyam spelt in reverse), a group company, that was on its way to becoming a real estate and infrastructure giant.
Second, we drew a blank when we tried to find out whether RBI was inquiring into the dubious Rs9,000-crore corporate debt restructuring (CDR) package to the politically powerful Lanco group. Our Right to Information applications were stonewalled. If pepper-spray Ladagapati Rajagopal (a member of parliament) fails to borrow more, it will probably be because his clout with the Congress leadership is irrelevant today. That is, probably, why he has been forced to sell his power plant to Adani Power recently.
If RBI were really serious about the quality of lending, it also ought to keep a watch on the mega-borrowings of two other groups—GVK and GMR. Instead, the chairman of the GMR group is on RBI’s central board of directors.
Another Hyderabad-based family that remains unscathed is that of the Reddys of Deccan Chronicle who faced allegations of forging documents to raise Rs170 crore from Future Capital. Is the case buried? Or is SEBI doing another slow investigation that will lead to meaningless action in a few years from now?
Then there is the flamboyant, Teflon-coated, Vijay Mallya, who joyously tweets about sporting events, while his bankers stew. Media reports say that Mr Mallya may, finally, be declared a wilful defaulter, but nobody reports why bankers have yet to invoke his personal guarantee. Remember, Mr Mallya went to court and won the right to pocket a guarantee fee, running into crores of rupees. He is in court again to stop United Bank of India (UBI) from declaring him a wilful defaulter. This is yet another example of how the powerful in India—whether government agencies or individuals—tie up matters in endless and, often, frivolous litigation and claims. They also get a patient hearing from the courts because of their ability to hire an array of ‘eminent’ (read expensive and politically powerful) lawyers.
Supreme Court Justice JS Khehar recently observed, with some anguish, that there should be “consequences to fighting on after having lost in every forum” causing a “direct loss to the nation” in terms of cost of litigation and waste of the court’s valuable time. This applies to Vijay Mallya as well.
The rot in nationalised banks is at the top and starts with the deal-making that precedes top appointments. RBI cannot avoid responsibility for poor supervision either. But it has remained strangely unembarrassed about the fact that bank officers and employees’ unions seem more concerned than RBI about escalating bad loans that threatening to turn banks sick. Bank unions have repeatedly pointed out that bank chairpersons get away scot-free, despite the worst kind of corruption leading to bad loans.
In 2010, I wrote, “…most of us were seriously shocked to discover that Central Bank of India’s former chairman & managing director HA Daruwalla would not be punished after a series of proven corruption cases.
Although charges against Ms Daruwalla were proved, all she got was a ‘letter of displeasure’ and only then did we discover that there are no provisions to hand out stiffer punishments to bank chairmen (except removal from service) who allow banks under their charge to be looted.”
An RTI activist also uncovered the fact that Central Bank of India spent Rs70 lakh in defending itself against a whistleblower, of which nearly Rs50 lakh went to the Supreme Court lawyer Abhishek Manu Singhvi who was the Congress spokesperson. Nothing has changed since then.
Cut to February 2014, when Archana Bhargava, chairperson of UBI, was allowed to take voluntary retirement under Dr Rajan’s watch. Not even a letter of displeasure was issued to her. In Ms Bhargava’s case, the Bank bounced back with improved financial results, immediately after her controversial exit, vindicating the allegation of senior bankers that she was deliberately and recklessly suppressing its performance. An inquiry revealed that she had bagged the post due to her political clout, despite a record of previous transgressions and investigations.
This history makes us sceptical about a clean-up action. In 2012, writing in Moneylife under the pen-name Gurpur, a senior banker, said, “NPAs have to be taken seriously because loss-making banks are inevitably bailed out and capitalised with the taxpayers’ money in India. There is another major issue that most analysts miss—banks are allowed large write-offs against NPAs which reduce their tax liability. Lower taxes paid means fiscal stress that has to be borne by taxpayers either as inflation or by higher tax rates.” Finally, taxpayers have to bear the cost of frequent recapitalisation of banks that happens without fixing accountability.
Let me end by pointing to the futility of corporate governance rules which are revised every few years. Every new scam exposes the hollowness of disclosure and compliance requirements. Satyam Computers failed, despite a glittering board, while Bhushan Steel was able to borrow a stupendous Rs40,000 crore (it is the country’s most indebted steel-maker), despite the most lacklustre board. It does have a former chief election commissioner in Brij Bihari Tandon, but the rest are faceless accountants and lawyers. MV Suryanarayanan, a former nominee of LIC, has clearly become so close to the company that he is now an ‘independent’ director.
In Syndicate Bank, a father passed on his directorship to his young daughter like a family right. That may only change because the new government will want its own appointees on bank boards. As for the middlemen in the Syndicate Bank episode their well-known shady past only requires a Google search.
The new Companies Act places onerous responsibilities on independent directors with serious consequences for failure. But the ministry for corporate affairs probably needs to be reminded about its new powers and prodded to act on them for public good.
Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at sucheta@moneylife.in ”
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